Economics as Science and Policy Advice: A Reply to Manzi

I hope to have a more complete reply to Jim Manzi’s assessment, but I wanted to make a couple of remarks off the cuff.

One Manzi says

Economists will sometimes make explicit claims that “the economic science says X,” and will more frequently make implicit claims for scientific knowledge by flatly asserting the known truth of some predictive assertion. This is normally a statement made around some specific policy question – we should (or should not) execute the following stimulus program; we should (or should not) raise the minimum wage right now, etc.

. . . all we have is an informed opinion of the type we might have from an expert historian rendering an opinion about something the likelihood that Libya would revert to an authoritarian government within ten years if it overthrew Gaddafi

Its important to distinguish between economics as science and economics as a policy driver. Manzi is focusing on economic statements that are made as policy drivers and saying it is only informed opinion. Yet this informed opinion is what is being offered. Economic science is a different enterprise.

Saying that we should execute the following stimulus program is much different than saying that we have an established scientific principle that stimulus has such-and-such effect. Contrary to intuition the first statement is far, far weaker. This is why “economic science says” is heard less frequently than “we should.”

Even setting aside personal values, “we should” is, by its very nature, a statement about subjective probability distributions. It is saying I believe that the distribution of possible effects in the stimulus world is – by some metric – superior or inferior to the distribution of possible effects in the non-stimulus world.

This requires only that you have some evidence – any evidence – that the stimulus is more likely than not to do things that you judge to be good or bad.

As such, saying that “we should” do something does not make an implicit claim about factual knowledge. Moreover, no one advising the government acts as if it does. Hardcore proponents of democracy assert that “we should” follow the advice of a group of people on the grounds that they have all survived to the age of 18. This is hardly a claim to any sort of scientific knowledge.

Now, I know Manzi’s complaint will be that economists come waving models and multipliers as if their recommendations were based on well established science. However, this is not how economists have traditionally offered their evidence. Economists are famous for refusing to draw firm conclusions and offering loads of caveats. As Harry Truman famously said

Give me a one-handed economist! All my economics say, ”On the one hand… on the other.

That scarcely represents overselling policy recommendations as scientific knowledge. In recent years some economists, myself included, have responded to the near relentless pressure for clear concise statements with

Our model suggests . . .

I believe you will find this statement repeated over and over again in congressional testimony. No “there is”, “there will be”, “it is a scientific fact.”

Our model suggests, gives you one interpretation. Many economists would love to stand before legislatures and give an hours long lecture on all of the evidence and competing possibilities. However, you get 20 minutes and the audience will demand that your story have a moral.

At the end of a presentation, more than once, the very first question has been this exact phrase: That’s all very interesting professor, but are you saying we should do this or not?

It’s a joke among my friends and family that I begin the answer with “Well, . . . “ Again, no false mantle of scientific certainty.

Conservatives will no doubt have noticed that one of Krugman’s major themes is that their point of view is stupid. One might be inclined to think that this is a rude way of saying “you do not have access to the scientific knowledge that I do”

It is not. It is a statement about what he thinks of your intelligence and ability to draw well formed conclusions.

He is not saying, I have such a deep understanding into the nature of the economy that everyone should listen to me. He is quite literally saying that the statements of conservatives convey such a shallow and imbecilic understanding of the economy that no one should consider listening to them.

He is not claiming the mantle of science, he is claiming the mantle of not being a moron.

On the opposite side of the spectrum, go back and look at the public statements of Milton Friedman. How many times did he lean on the fact that economics had established scientific knowledge that shouldn’t be questioned.

He always began with very simple facts and then drew out a small, compelling story. At worst, he would say “look at the evidence” and then proceed to offer the type of simple statistics that wouldn’t be uncommon in an Op-Ed.

Again, no implicit claim to scientific knowledge, only an implicit claim that reasonable informed people would agree with him.

The public policy statements of economists aren’t assertions of scientific knowledge. They are informed argument and economists present them as such. There is no doubt that economists use their knowledge of economic science to inform their policy arguments. Yet, in making those arguments they are not claiming scientific knowledge that they do not possess.

What you can argue is that economists think that they are smarter than everyone else. Indeed, economists across the political spectrum have made precisely that point. From Greg Mankiw

Larry, Vindicated

“President Summers asked me, didn’t I agree that, in general, economists are smarter than political scientists, and political scientists are smarter than sociologists?” [former dean Peter] Ellison told the Globe.

Here (via Mark Perry, posted two days ago) are GRE scores by field. Economists rank number 4. Political scientists are number 17, and sociologists are number 23.

In short, Manzi’s true point shouldn’t be that economists falsely assert scientific knowledge were there is none. It should be that we are arrogant pricks. I think many economists would agree.

4 comments

This is a USA-specific comment. In my country, the best students are directed towards 1. Mathematics, 2. Physics, 3. Chemistry, 4. Engineering, 5. Politics (approximate ranking based on my recollection of the way things were 20 years ago when I was a student, it may well be different now), and Economics ranked well below all of that, well below Cinema studies, Latin, Greek, and so on. In fact, if you studied economics you were deemed at best a second-rate student. Economics consisted mainly in looking at population tables and employment by industry. As lame as possible. Thus I never took an economics class in my country. I turned to it when I went to study in the UK. And pretty much all of our first-rate economists are converted (second-rate?) mathematicians. The country? France, but I think you could say the same of several other European countries, not to mention former Eastern block countries…